Travelers Q2 Earnings Beat on Strong Net Investment Income

Core Insights - The Travelers Companies (TRV) reported a second-quarter 2025 core income of $6.51 per share, exceeding the Zacks Consensus Estimate by 83.8% and more than doubling from the previous year [1][9] - Total revenues increased by 6.7% year over year to $12.1 billion, driven by higher premiums and improved net investment income, although it slightly missed the Zacks Consensus Estimate by 0.7% [2][9] - Net written premiums reached a record $11.5 billion, up 4% year over year, surpassing the estimate of $10.9 billion [2] Financial Performance - Net investment income rose by 6% year over year to $942 million, primarily due to growth in average invested assets and higher average yield, although it was below the estimate of $992.8 million [3] - Catastrophe losses were reported at $927 million, significantly lower than the $1.5 billion loss from the same quarter last year [3] - The underwriting profit was $1 billion, a substantial improvement from a loss of $65 million in the prior year, with the consolidated underlying combined ratio improving by 300 basis points to 84.7 [4] Segment Analysis - Business Insurance segment saw net written premiums increase by 5% year over year to approximately $5.8 billion, beating the estimate of $5.4 billion [6] - The combined ratio for Business Insurance improved by 250 basis points to 93.6, benefiting from lower catastrophe losses and higher net favorable prior year reserve development [7] - Bond & Specialty Insurance segment reported net written premiums of $1.1 billion, reflecting a 4% year-over-year increase, with a combined ratio improvement of 740 basis points to 80.3 [10] Shareholder Returns - The company returned $809 million to shareholders in Q2 2025, including $557 million used for share repurchases of 2.1 million shares [14] - A quarterly dividend of $1.10 per share was announced, payable on September 30, 2025, to shareholders of record by September 10, 2025 [14]